September 14, 2018

“From a budding brand to THE brand of bud (and beyond!)”

 

Seth Hillstrom:

Alcohol, Cannabis. Inextricably tied as substitutes, or fairly unique markets? Maybe different answers for different categories of alcohol?
Luckily, we’re joined by Dennis O’Malley, CEO of Caliva, the leading brand of cannabis in the US, to take a look at how they’ve built their brand, and where they see themselves fitting into the marketplace.
Dennis, thanks so much for joining us today!

Hi Seth! Happy to participate today – looking forward to this!

Seth:

Dennis, when we first spoke about Caliva, one of the first things you said to me is “we’re building the most trusted brand in Cannabis.” And as we both know, the brand itself is hypercritical to the scale/potential of future success. Can you tell us about the brand pillars and heritage story that define Caliva – and why they seem to be resonating so well with marijuana consumers?

Dennis:

Great question. Our heritage story is that we sought to build a foundational platform to be able to produce great consumer products. This required building out a world-class production facility for our raw materials (flower & oil) as well as a high tech manufacturing facility to produce the end products. We seek to deliver against a brand promise of Consistency, Transparency, and Accessibility. We knew in order to acheive that we needed very high standards, pristine compliance, and control of quality through vertical integration. To us trust means confidence and we are making strides to becoming “The Most Trusted Brand in Cannabis”.

Seth:

Prior to being named CEO of the top cannabis company in the nation, you’ve had plenty of opportunities to work closely with the beverage industry (having served many of the leading brands through ReadyPulse/ExpertVoice). Now, as you build the most trusted name in cannabis, Caliva is poised to continuously innovate in a rapidly developing marketplace (that you’re in many ways already leading). We’ve already seen leading alcohol companies make investments and/or take cannabis-infused drinks to market…Is it time we see the leading cannabis brand release its own line of drinks?

Dennis:

Lead the witness much? 🙂 We see beverages as a macro-category for consumers. Consumers are seeking natural health, wellness, and recreational choices for their lifestyle. Cannabis beverages today have been hindered by lack of consistency, long length of onset, and a general poor consumer experience. You will definitely see Caliva making strides in this space. We have an amazing science and product team that has been hard at work for the last year to ensure we have the right technology to be able to produce great cannabis beverage products.

Seth:

As far as cannabis-based beverages go – do you have any thoughts on whether the larger market rests with strictly cannabis-based drinks, or with cannabis-alcohol hybrids? And if you are considering entering the drinks space, any thoughts on which you’d target?

Dennis:

There are many regulations around mixing alcohol and cannabis (THC or CBD) in a beverage today. We will be focusing on cannabis only beverages – both THC and CBD.

Seth:

In the same vein, there’s a lot of debate about whether or not marijuana is a substitute for alcohol – and if so, whether or not that applies equally to all categories (i.e. beer, wine & spirits). First…What’s your take on this? Do you believe alcohol sales have a pretty direct inverse correlation to marijuana sales? I see good points on both sides of the “long-run” argument.

Dennis:

I think this debate will be going on 10 years from now. There is massive room & growth for both beverage types. In the end I think this will lead to increased competition and the consumer will win. This is what I know from my experience – that new entrants to the legal drinking age are choosing recreational options that do not have as many negative affects. For many that has been a swing to cannabis and I think as we see cannabis beverages improve the speed of adoption will be accelerated. Cowen has the best in depth research report on this trend:

http://www.cowen.com/reports/cannabis-75b-opportunity-category-cross-currents-keep-us-cautious-on-booze/

Seth:

Finally, can you tell us what it’s like leading one the fastest growing companies in one of the fastest growing industries in the US? Between production/scale growth, constant NPD/innovation, a growing retail footprint, a rapidly maturing brand (that’s already been named #1 in the country by Business Insider) and everything else on your plate…what does a day in the life look like?

Dennis:

It’s all-consuming and the 300+ associates and I at Caliva wouldn’t have it any other way! Operating a vertically integrated, highly regulated business that is on a hockey stick growth curve is the challenge of a career. We truly believe in our mission to provide natural health and wellness options to consumers who chose cannabis. We definitely also see a large responsibility to be able to deliver safe and consistent products. We run our business throughout CA and it is a 7 day a week, 18hrs a day operation. As for a window into a day – its always about the people first. It’s about our associates, its about our 400k+ consumers in the state who have chosen Caliva products through great partners like eaze.com, and its about our 100+ retail partners. But it’s also about the plants – which naturally grow the active ingredients that make people’s lives better. Our mantra is “Happy Plants. Happy People.”

Seth:

Dennis, thank you so much for joining us today! And for anyone who wants to hear the full story, please join Dennis and myself in Las Vegas next month for eBev 2018: http://ebevseries.com 

Dennis:

Thanks Seth – was a pleasure. Looking forward to the event in Oct.

 

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